USD/JPY oscillates in a range above mid-111.00s, key US GDP report awaited

   •  Disappointing Japanese industrial production helped gain some traction/bounce off lows.
   •  A modest USD pullback/cautious mood now seemed to keep a lid on any strong recovery.
   •  Today’s key focus will remain on the important release of advance US Q1 GDP report.

The USD/JPY pair failed to capitalize on the intraday bounce and quickly retreated around 15-20 pips from daily tops touched during the Asian session.

Despite the overnight sharp intraday decline to two-week tops, the pair showed some resilience below the very important 200-day SMA and managed to catch some bids on the last trading day of the week following the disappointing release of Japanese industrial production data. 

In fact, the factory output in March contracted 0.9% m/m – marking the biggest decline since 2015, as against a drop of 0.1% expected and a downwardly revised 0.7% growth in the previous month, which eventually turned out to be one of the key factors weighing on the Japanese Yen.  

Meanwhile, the US Dollar struggled to preserve the overnight strong up-move to the highest level since May 2017, further supported by upbeat US durable goods orders data, and remained on the defensive as investors now seemed reluctant to place fresh bullish bets ahead of today's important release of the US  Q1 GDP report. 

Heading into the key data risk, the prevalent cautious mood was further seen underpinning the Japanese Yen's relative safe-haven demand and further collaborated towards keeping a lid on any strong follow-through recovery for the major, at least for the time being.

Technical levels to watch